The three-year financial plan for Preston City Council, due to be discussed at cabinet on Wednesday, sets out how the Labour administration plan to spend millions of pounds on improving the city, while struggling to balance the books.

Preston Town Hall will see its grant from the government reduced by £5.5m in this financial year, triggering a number of redundancies and savings.

Leader of the council, Peter Rankin, has also decided a council tax freeze will be scrapped – with rates going up 3.5%, equating to £9 a year extra for Band D properties.

Some council services including leisure, cemetery and car parking charges will also see steady increases over the coming years.

In plans set out by cabinet member for resources, Martyn Rawlinson, 18 council jobs will disappear.

Six are roles which are currently vacant and Coun Rawlinson says many can be cut through voluntary redundancy and retirement. Plus other posts will become redundant at the end of the Guild year.

He said: “The speed and depth of the grant reductions, coupled with other budget pressures linked to the recession means that some cuts and sharing of services with other councils are unavoidable. Labour in Preston though, is fighting back. We are resisting privatisation and limiting cuts through smarter working and reducing overheads.”

The budget also ring-fences £2m in funding for the Preston Guild and commits the administration to redeveloping the city centre despite the turmoil surrounding the Tithebarn scheme.

However, a regular saving of £100,000-a-year which is normally put away for future Guild years has been suspended in favour of investing in infrastructure and trying to capitalise on tourism off the back of the event.

Cllr Rawlinson said the council were pursuing city centre development options that will improve the city centre offer and be protecting historic buildings like the covered markets, the old post office and the Harris Museum.

Leader of the Liberal Democrat group, Bill Shannon, blasted the council tax increase.

He said: “All over England, local authorities are tightening their belts and deciding it would be totally unacceptable in the present economic climate to increase Council Tax.

“Not here in Preston, though, where Labour are slamming on an unbelievable 3.5% increase, despite the fact that most public sector employees face another year without salary increases.

“But then it’s so much easier to increase taxes than tackle the real issues.”

You can view the full budget proposals along with the three year financial plan for the city on the Preston council website.